|
Characteristics of Part groups |
Sample Parts for Manufacturing |
% material $ excl. Electrical |
Global Sourcing Approach |
Potential Savings % |
| I |
Cost driven predominantly by labor |
Precision machined parts, shafts, valves, controllers |
5 - 10% |
Go to country with sustainable low labor costs |
50 - 70% |
| II |
Technically sophisticated, high labor requirements |
Investment casting, machined castings pinions, worm gears |
15 - 20% |
Invest in skills of supplier w/ low labor costs |
40 - 60% |
| III |
Average parts (costs driven by labor, material, cap) |
Fabricated sheet-metal assemblies, forgings, stampings |
10 - 15% |
Decide part by part- using Total cost global sources |
30 - 50% |
| IV |
Technically sophisticated, low labor requirements |
Electronics, Camshafts, engine-block-pistons |
25 – 30% |
Go to nearby low-cost, high-skill supplier in NAFTA |
20 – 40% |
| V |
Cost driven predominantly by raw materials |
Wiring harnesses, carpets, rubber tires |
5 – 10% |
Go to supplier with sustainable low materials costs |
10 – 20% |
| VI |
Difficult to ship part due to bulk/fragility |
Seats, Fabricated buckets, fuel tank, windshield |
25 -30% |
Stay at home, but trim supply base |
0 – 5% |
